UK Could Save £1 Billion by Halting Interest on BOE Reserves
- ECB cancelled interest €165 billion of deposits last week
- Central bank’s interest bill soared with rate hikes and QE
The Bank of England in the City of London.
Photographer: Jason Alden/BloombergThis article is for subscribers only.
The UK government would save about £1 billion ($1.3 billion) a year if the Bank of England copied the European Central Bank and cancelled interest on some of the money it controls, according to Numis analyst Jonathan Pierce.
The ECB last week said it would stop paying commercial banks interest on some €165 billion (£141 billion) of deposits they’re required to keep at the central bank as a minimum reserve.